According to CRISIL Karnataka is the second-fastest growing state

 BENGALURU: As per the analytics firm Crisil, Karnataka is the second-fastest growing state between 2013 and 2017 — with an average growth of 8.1% — and was among the top 5 in 2017-18, with a 9.3% growth.

It has been reported before that between 2016 and 2018, that the state had gained the highest amount of investment proposals. In 2017, it had attracted as high as 44% of the total investment intentions in the country.

Unlike Gujarat, the growth in Karnataka has been led by its services sector, and much of this services sector growth is due to the IT sector. While agriculture and the industries are growing at 4-5% or less, the services sector has been growing consistently between about 8.5% and 10.4% during this period.

The IT sector, which is accountable for the 20% of  GDP of the state, has been growing similarly. Karnataka is the nest to over 3,500 IT companies, which contribute to over $32 billion of exports.

The MD of the Volvo India Kamal Bali, who is also the chairperson of the Karnataka State Council of industry chamber CII, said that the services sector contributes two thirds of the GDP for the state. “It’s the ecosystem built over many years that is making it an attractive proposition for companies and investors to put the state at the centre of their growth story. Bengaluru has a good mix of skills in newer areas like IoT, AI, machine learning, offering global firms a quick, ready talent pool,” he said.

Kris Gopalakrishnan the co-founder of Infosys, has that the state government has also taken a number of measures to nurture innovation and entrepreneurship. The state has been a pioneer in framing policies for the IT, semiconductors, startups, and even electric vehicles.

The government has successfully done this by maintaining its fiscal deficit within the limit of 3% of the state GDP which is a limit that is needed for a long-term sustainability.